It would probably be safe to say that, as a rule, clinical coding excites only a small and select band of people. The advent of Payment by Results, under which NHS organisations will be paid for the work they do, is set to change all that.

Coding matters, says Lynn Bracewell, NHS Classifications Service Manager at NHS Connecting for Health. She spelt the issue out very simply at a recent HSJ conference on PbR. “Trusts now have a financial incentive to ensure that coding is accurate, comprehensive, timely and complete.”

Foundation trusts – the first to implement PbR – have been quick to recognise this. Bradford Hospitals’ Foundation Trust prospectus cited improved coding as a means to increase income by £2m a year.

Peterborough and Stamford Hospitals NHS foundation trust this year invested in their IT systems to the point that 99.9 per cent of their clinical coding data can be viewed on line within four days of the month’s end.

“It’s not rocket science,” says Neal Dawkins, head of information services at the trust. “Essentially we have taken our database and front ended it with a web page.”

Now the Audit Commission and the NHS Counter Fraud Service are taking an active interest. They are developing the assurance and audit regime around PbR as it moves into the wider NHS and increases in scope. Coding issues will be central.

A revised version of OPCS4 – the classification system developed in 1987 to code surgical data and recognised as out of date since 1995 – is due to hit the NHS in April 2006. Meanwhile work is underway on a new national coding strategy.

But all is not well. The tension created by PbR is already being made manifest in coding clashes and disputes. Across the country primary care trusts are accusing NHS trusts of “upcoding”—securing additional income through coding.

Lesley Hill, deputy chief executive of North Bradford PCT, told the HSJ conference: ‘We are finding it very difficult to prove but we have a strong sense of upcoding taking place.”

Ms Bracewell is sure from her contacts with coding managers that Hill is right. Coding managers are coming under “undue pressure” to upcode with the result that many are considering leaving the job, she said.

The worst case she has encountered was a trust where coders were asked to record minimal access surgery as day case surgery, generating an extra £70,000 income for the trust.

Some of the arguments reflect coding anomalies and the fact that systems are out of date. Many a PCT manager will recognise code N12 as an issue. It relates to bleeding in early pregnancy where historically a woman would nip up to the ward for tests and be sent home. Now many trusts are recording this as an admission – and charging accordingly.

In North Bradford the N12 issue was solved by GPs and obstetricians who agreed that most cases should be coded for an out patient admission.

Peter Herring, chief executive at the Countess of Chester Hospital trust, is currently engaged in an argument with Chester West PCT around £1.4 million worth of work. The trust says it reflects an increasing complexity in its case mix; the PCT says it’s down to coding.

“The issue has never been resolved,’ Mr Herring told the HSJ conference. “It is very difficult in practical terms to determine whether a change in case mix is real or an artefact of coding.”

Trusts face other problems too. Many trusts have a huge backlog of uncoded work. Others are struggling to complete meet deadlines and relying on incomplete data. This leaves coders using the default R69 code – unknown and unspecified causes of morbidity. Trusts cannot charge accurately on the basis of this code.

In the last year there has been a 500,000 rise in the use of code R69, says Ms Bracewell, and the Department of Health wants to know why.

Within coding departments there are also serious problems. “They are understaffed and underpaid,” said Ms Bracewell. Coding staff are not receiving the training and development they need to keep pace and there is too little investment in IT systems to support clinical coding.

Staff do, though, have a new group to increase awareness of their role and promote the understanding of the value of coded data. The Professional Association of Clinical Coders was formed to improve the profile and status of clinical coders and other professionals working within the UK clinical classifications arena.

Ms Bracewell has a simple message. NHS trusts that have invested in their coding – IT and staff development – will be much better placed to deal with the brave new PbR world. “If you haven’t invested you are going to experience some struggles,” she warned. “Either way there are some challenges ahead.”